California Could Give Car Owners Up to $800 in Gas Cards

The state hopes to offset high gas prices with a direct contribution to tax payer’s wallets.

byLewin Day| UPDATED Mar 23, 2022 8:21 PM
California Could Give Car Owners Up to $800 in Gas Cards

As Russia's invasion of Ukraine drags onwards, energy prices remain high with little sign of relief coming any time soon. Californians have been particularly hard hit, with Governor Gavin Newsom proposing a rebate to help out drivers at the pump, reports CalMatters.

Talk of a rebate was first floated by Newsom in early March, with specific details on the full scheme revealed on Wednesday. Newsom's plan involves sending $400 debit cards to owners of registered vehicles, up to a limit of two per person. "Today we're announcing a $9 billion tax refund to tens of millions of Californians," said Newsom, adding "That direct relief will address the issue that we all are struggling to address and that is the issue of gas prices."

California currently leads the country in gas prices, with statistics from AAA reporting a state average of $5.875 a gallon at the pump for regular gasoline. It's a significant hike above the national average, which currently sits at $4.237 a gallon, surpassing record highs seen earlier this month.

Newsom has also proposed a $2 billion additional grant package, of which $750 million is to support public transport agencies to provide free transport to passengers for 3 months. The aim is to allow the 3 million Californian residents that use public transport each day to travel fare-free. $600 million of the package will support a pause on a fraction of diesel sales tax for a year, while $523 million will go to offsetting a pause on a planned inflation adjustment to gas and diesel tax rates. 

The measures are subject to negotiation with the California State Legislature, and thus potential relief will likely come months down the track as a part of the upcoming state budget. The Legislature needs to pass its spending plan by June 15th, else California lawmakers will forfeit salary and expenses payments for each day until the budget passes. If Newsom's measures do go ahead, it's expected that the state will send out gas cards to registered vehicle owners in July. 

It's not the only relief proposal on the table, however. A group of Democratic members of the California State Assembly have suggested sending $400 checks to each California taxpayer, with the policy similarly costed at $9 billion. 

Meanwhile, another proposal would send $200 payments to taxpayers and their dependents, costed at $7 billion and supported by Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon. This latter proposal would be means-tested, only being sent to households with earnings beneath $250,000 a year. Wishing to see the relief targeted where it's needed most, Atkins stated that "The Senate is focused on ensuring that state money is targeted to those who actually need relief."

These measures may all be costed in the billions of dollars, but California is well-placed to act on the current crisis. The state is presently operating with a large budget surplus, which was forecasted to be over $45 billion in January and has since only risen from there, as covered by KTLA in February.

It seems unlikely that many Californian drivers will rail against a plan set to put hundreds of dollars back in their pockets while gas prices remain sky high. The only remaining question is whether the Legislature can pass the measures in due time to properly support those doing it tough right now. 

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